Report: Manhattan retail rents plunging

May 7, 2009

New York City A seven-year boom in Manhattan’s retail rent costs has finally run its course. Rental costs plunged 11% since fall 2008, a drop that puts asking rents down to approximately $115 per square foot, according to the Real Estate Board of New York’s annual spring report.

The study, released Thursday, covers all of Manhattan’s neighborhoods, including the city’s prime retail regions. Understandably, these areas took the strongest hits. For example, the asking rents in the Flatiron District dropped 29% to $285 a sq. ft., and Broadway between West 72nd and West 86th Streets dipped 24% to $293. This neighborhood commanded $384 last spring, the study said.

Even the busy Herald Square area between Fifth and Seventh Avenues took a 23% slide to $508.

“Declines in asking rents have just begun to be reported, although the retail market has been feeling the effects of the recession for some time,” REBNY president Steven Spinola said in a statement.

Lower rents could open the door to new tenants that were previously intimidated by high rates. Discount retailers, including Nordstrom’s Rack outlet chain, Marshall’s and T.J. Maxx could be among the first to take advantage of the lower asking prices, according to an article in Crain’s New York Business.

Solutions Spotlight

The responsibilities of the retail CIO can essentially be boiled down to four major roles: Business Transformer, Customer Expert and Advocate, Technology Visionary and Culture Warrior. In this e-book, Oracle chief communications officer Bob Evans examines how great retail CIOs rise to challenges of fulfilling each role, even as they inevitably gravitate toward one role over the others.